PwC Forensic Services Professionals Release A Guide to Forensic Accounting Investigation, Second Edition: Detect. Investigate. Prevent.

Increased demand for auditors to take more responsibility for fraud detection

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Jul 28, 2011, 09:00 ET

NEW YORK, July 28, 2011 /PRNewswire/ -- Released today by PwC, A Guide to Forensic Accounting Investigation, Second Edition offers a step-by-step approach to understanding the complexity of fraud prevention, investigation and deterrence. The book provides forensic accounting specialists with new coverage on the latest PCAOB Auditing Standards, the Foreign Corrupt Practices Act, and options fraud, as well as on fraud in China and its implications.

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"High-level perpetrators cause the greatest damage to their organizations," said Steven Skalak, partner in PwC's Forensic Services practice, currently based in Beijing. "In fact, frauds committed by owners and executives were more than three times as costly as frauds committed by managers, and more than nine times as costly as employee frauds. In A Guide to Forensic Accounting Investigation, Second Edition, fraud preventers -that is Board Members, CFOs, Controllers, Auditors, and COOs - will find the necessary practical aids, case examples, and skills for identifying situations that call for extended fraud detection procedures."

A Guide to Forensic Accounting Investigation, Second Edition explores key fraud statistics such as:

The typical organization loses 5 percent of its annual revenue to fraud. That translates to a potential total fraud loss of more than $2.9 trillion.
The median loss caused by occupational fraud cases was $160,000. Nearly one-quarter of fraud involves losses of at least $1 million.
Frauds lasted a median of 18 months before being detected.
Asset misappropriation schemes represent 90 percent of cases – though they were also the least costly, causing a median loss of $135,000.
Financial statement fraud schemes make up less than 5 percent of frauds, but caused a median loss of more than $4 million – by far the most costly category.
Corruption schemes comprise just under one-third of cases and cause a median loss of $250,000.

"Public anger over occurrences of massive fraud has spawned legislation, oversight, and greater penalties for those who conspire, commit, or conceal fraud," adds Erik Skramstad, PwC partner and U.S. forensic services practice leader. "The marketplace is demanding that the business community - including auditors - 'step up its game' in finding fraud; but there's a significant and legitimate difference between performing an audit and conducting a financial fraud investigation. This Guide explores and explains those differences."

For more information on A Guide to Forensic Accounting Investigation, Second Edition please visit: http://www.pwc.com/us/en/forensic-services/publications/guide-forensic-accounting-investigations-2nd-edition.jhtml

About PwC's Forensic Services

PwC global Forensic Services team of experienced professionals is dedicated to meeting the challenges caused by fraud allegations, financial crimes and other irregularities. Our portfolio of specialist services includes: Financial Crime Examinations, Forensic Technology Solutions, Regulatory Compliance Reviews, Fraud Risk Management and Fraud Prevention, Dispute Analysis and Litigation Support. The Forensic Services team also manages the PwC Fraud Forum, an exclusive community where members can gain knowledge, participate in events and share important insights on preventing, detecting and investigating fraud, corruption and economic crime. See www.pwc.com/us/forensics and http://usfraudforum.pwc.com for more information.

About PwC's Advisory Practice

PwC's Advisory professionals help organizations improve business performance, respond quickly and effectively to crisis, and extract value from transactions. We understand our clients' industries and unique business challenges, and look across the entire organization -- focusing on strategy, structure, people, process and technology -- to help clients build their next competitive advantage. See www.pwc.com/us/advisory for more information.

About the PwC Network

PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information.

© 2011 PwC. All rights reserved. "PwC" and "PwC US" refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

SOURCE PwC